Friday, June 24, 2005

War for oil reaps disaster

A little over two years ago, Tony Blair told a packed parliament that the impending invasion of Iraq had nothing to do with oil, adding that if we really needed the oil, it would be much easier and cheaper to simply buy it from Iraq. At the ABCs Munster Forum six months later, pro-war columnist Greg Sheridan declared the war for oil accusation was an undergraduate conspiracy theory peddled by anti-american elements of the lunatic fringe.

These arguments are still used by those who believe the war in Iraq has nothing to do with oil and that spreading freedom and democracy in Iraq is an act of pure altruism. The countless dead and wounded, the leveled towns and broken homes, the $200 billion spent so far are a testament to the incomparable philanthropy of George W Bush.

It is, of course, either naive or misleading to imply that mere access to oil was the sole motivation behind the Bush administrations desire to attack Iraq. Clearly, the plan was to establish a permanent military presence at the center of the worlds most important oil producing region. US military dominance of the Persian Gulf is an essential component of Americas geostrategic agenda, which, it should be noted, enjoys bipartisan support in Australia. The goal is to secure and ensure the flow of Gulf oil. Why? Because, as Bush recently put it, Were hooked on oil from the Middle East, which is a national security problem and an economic security problem.

America is not just the worlds greatest consumer of oil, devouring in excess of 20 million barrels a day, it is also a significant oil producer. For more than a hundred years, America prospered as the worlds leading oil producing nation. That began to change in the 1970s, following the peak in US oil production. Since then, the depletion of US oil reserves has led to a decline in Americas domestic oil industry. Compared to the giant Saudi and Iraqi oil fields, which can produce oil for less than a dollar a barrel, US oil fields are simply not competitive.

It would be a mistake to assume that the Bush plan was to hand Iraqi oil fields over to US oil companies, who would then rapidly develop those oil fields to boost production and thereby lower the price of oil. This seems to have been the reasoning behind Rupert Murdochs prediction that The greatest thing to come out of this [war] would be $20 a barrel for oil. But such a course was never really viable. For a start, Bush has no authority to appropriate Iraqi oil. Companies that collude in what amounts to theft would be exposed to litigation, and Big Oil may not share Bushs cavalier disregard for the law.

The United States need for oil, according to economist Henry Liu, is not a credible justification for war [because] the US already controls most of the worlds oil by virtue of oil being denominated in dollars that the US can print at will with little penalty. However, Liu notes, war spending is an economic stimulant, so long as collateral damage from war occurs only on foreign soil. War profits are always good for business, and the need for soldiers reduces unemployment.

Furthermore, increased oil production and lower oil prices would not benefit the oil majors. As Liu explains, oil in the ground is now more valuable than oil above ground because it can serve as a monetizable asset through asset-backed securities in the wild world of structured finance... while there is incentive to find more oil to enlarge the asset base, there is little incentive to pump it out of the ground merely to keep prices low.

Another obstacle for Bush is the Organisation of Petroleum Exporting Countries (OPEC), of which Iraq is a member. The privatization of Iraqi oil reserves would be seen as a direct challenge to OPECs authority and credibility, and a threat to OPECs oil revenues. OPEC would certainly resist any attempt by Washington to reduce the power and influence that OPEC currently enjoys. And lets not forget, any reduction in the price of oil would also make it harder for the embattled US domestic oil industry to compete on the world market.

Bush and Cheney are Texan oil men and Condi Rice sat on the board of Chevron for eight years before joining the Bush administration. These people have close ties to the US oil industry, they are aware of its difficulties and they understand the geostrategic importance of oil. The security and control of energy resources is, and always has been, the single most important aspect of national security. Without a guaranteed supply of fuel, even the worlds greatest economy is vulnerable.

It doesnt take a genius to figure out that America intends to maintain its sole superpower status indefinitely, and for that reason it will continue to disregard world opinion and the rule of international law. The hubris associated with this attitude has the unfortunate side-effect of suppressing rational thought and discouraging intelligent discourse. Such uncompromising self-certainty and contempt for reason can have disastrous consequences. Already we are witnessing a diminution in the power and credibility of the US administration.

Targeted assassinations, indefinite detention without trial, summary executions, torture and other crimes committed by US military personnel, hired guns and intelligence agents operating in Iraq, Afghanistan and elsewhere, have tarnished Americas reputation as a champion of human rights and raised doubts about the United States commitment to justice, due process and the rule of law. Senior administration officials are facing increased scrutiny and criticism of their role in leading the nation to war. The threat of legal indictments and presidential impeachment appears to be mounting.

The occupation of Iraq places huge financial burden on the US budget and puts enormous stress on the US military. The constant loss of personnel and equipment is draining the morale and resources of US forces, causing great consternation among senior military officials. The public is getting sick of the daily carnage and there is a growing demand for some kind of exit strategy. But Bush has no such plans. He cannot possibly withdraw from Iraq. The puppet regime will not survive without US military support, and having already invested many billions in the construction of fourteen hi-tech military bases, the US is obviously not planning to leave Iraq any time soon.

As the costs mount, the fight gets harder. For two years now, US forces have been attempting to impose their authority on the people of Iraq. But all the while, resistance has grown stronger. Part of the problem is the calculus employed to measure success. From the militarys point of view, flattening a village is a small victory, killing Iraqis is the way to win. By systematically destroying towns and killing Iraqis, the military hopes to win the war and achieve total victory.

But to be fair, not all military minds think this way. Tom Lasseter quotes Marine Major Nicholas Visconti as saying If it were just killing people that would win this, itd be easy... Killing people is not the answer; rebuilding the cities is. Unfortunately, such level headed logic eludes the civilian leadership and military brass at the Pentagon.

The occupation itself is a catalyst for violence and a guarantee of further conflict. The continuing bloodshed serves to entrench anger, hatred and fear. This vicious spiral into death worship and chaos creates its own vortex, a tornado of madness, a furnace of horror that consumes civilians as well as combatants. It spreads terror and breeds violence. The CIA is now warning that Saudi Arabia, Jordan and other countries will have to contend with militants who leave Iraq equipped with considerable experience and training.

Extricating ourselves from this nightmare will not be easy, and it wont happen while our political leadership conducts the business of state in secret, unaccountable and unsupervised. The occupation of Iraq is yet another product of an aggressive industrial paradigm that promotes the exploitation and desecration of earths riches - a mindset that destroys life and poisons the soul. The lifestyle we take for granted, the comforts and convenience of the modern world, this culture demands massive and unsustainable energy consumption. Our dependence on finite, nonrenewable energy resources is a huge vulnerability, one we must confront openly and honestly.

Bush and his team rant about freedom and democracy but their actions betray greed and hypocrisy. It is unlikely that his administration or their local counterparts or any of their successors will embrace the transition to an ecologically sustainable, low energy, low growth social economy, based on local permaculture gardens, food forests, appropriate technology and cottage industries, free from the hyperactive neuroses of neoliberal economania. The habit of the ruling elite is to serve and protect the interests of the wealthy. It is the task of citizens to promote social and political change through debate, education, civil protest and nonviolent direct action.